Independent Contractor Tax Forms

Most caregivers employed by homecare agencies are classified as W-2 employees, not independent contractors. This means their taxes are automatically withheld, and they do not receive 1099 forms. However, your agency may occasionally work with true independent contractors (For example, consultants, therapists, or other professionals providing specialized services). In these cases, the following tax forms apply.

• Form W-9: Request for Taxpayer Identification Number and Certification

  Before paying an independent contractor, your agency should request a Form W-9.

  This form provides the contractor’s Taxpayer Identification Number (TIN) and certifies that they are not subject to backup withholding. The information on the W-9 is used to prepare 1099 forms at year-end.

• Form 1099-NEC: Nonemployee Compensation

  If your agency pays an independent contractor $600 or more during the calendar year, you must issue a Form 1099-NEC to report the total amount paid.

  The contractor uses this form to report their income to the IRS.

  A copy of the form must also be submitted to the IRS by your agency.

• Form 1099-MISC: Miscellaneous Information

  Form 1099-MISC is used for types of payments other than nonemployee compensation, such as rent, royalties, or awards. Most agencies will not use this form for contractor payments, but may issue it for other types of vendor transactions.

• Form 1096: Annual Summary and Transmittal of U.S. Information Returns

  When your agency submits paper 1099 forms to the IRS, a Form 1096 must also be included. This acts as a summary of all 1099 forms issued by your agency (If you file electronically, Form 1096 is not required).